eBay Auctions: Going, Going...

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eBay veteran Hershenson now sells movie posters on his own site Stefan Hester

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Under eBay's old fee structure, Hershenson paid about $2 in fees to eBay when he sold a $40 poster at auction. With the new fees, he would pay $2.87. Those pennies add up. Hershenson estimates his fees would increase from $120,000 a year to $180,000 under the new fee structure.

But eBay won't be getting that money from Hershenson. He hung up his eBay gavel for good earlier this month, and he's selling posters from his own site, eMoviePoster.com, instead. Most of his regular customers have already followed him, he says. He plans to attract others with advertising purchased with the savings from not paying eBay's fees.

Most eBay sellers can't set up their own site or leave for a rival site, however. With nearly 90 million active users—many times the number on alternative sites—eBay dominates the business. Sellers who stay aren't suffering in silence. They've filled message boards with calls to fire Donahoe and organized seller boycotts, including one for a week in May. Maggie Dressler, an eBay seller who has auctioned antique trains and toys on the site since 2001, says the company's treatment of auctioneers is "deplorable."

Auctions will always have a place on the site, says eBay. "Auctions are incredible fun and still the best way to get the right value on many products," says Lorrie Norrington, president for global marketplace operations at eBay. "[However,] the format buyers choose is not as important as the experience they have." The company is expected to make some site revisions to placate auctioneers. It's likely to redesign certain Web pages to give more prominence to auctions, particularly in categories with unique merchandise such as collectible stamps and coins.

Hershenson predicts auctions on eBay will undergo more fundamental changes in the years ahead. He thinks that as more fixed-price goods show up on the site, sellers will have a hard time getting the attention of enough bidders for a viable auction. Auctioneers will eventually close up shop. "Their changes will have the result of ending auctions as we know it on eBay," he says.

Holahan is a writer for BusinessWeek.com in New York.